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How Does Fiscal Policy Affect GDP and Inflation in Ukraine?

Author

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  • Artem Vdovychenko

    (National Bank of Ukraine)

Abstract

In this study, we apply the Blanchard-Perotti approach to estimating the impact of fiscal policy on GDP and inflation in Ukraine. By disaggregating fiscal data, we were able to determine which items of the budget have the most influence on real GDP and inflation. Our results show that fiscal multipliers in Ukraine in absolute values are higher for budget expenditures than for taxes. In addition, both budget expenditures and taxes have a positive impact on inflation.

Suggested Citation

  • Artem Vdovychenko, 2018. "How Does Fiscal Policy Affect GDP and Inflation in Ukraine?," Visnyk of the National Bank of Ukraine, National Bank of Ukraine, issue 244, pages 25-43.
    • Handle: RePEc:ukb:journl:y:2018:i:244:p:25-43
    DOI: 10.26531/vnbu2018.244.02
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    References listed on IDEAS

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    1. Umut UNAL, 2015. "Rethinking The Effects Of Fiscal Policy On Macroeconomic Aggregates: A Disaggregated Svar Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 120-135, September.
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    5. Ilzetzki, Ethan & Mendoza, Enrique G. & Végh, Carlos A., 2013. "How big (small?) are fiscal multipliers?," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 239-254.
    6. Roberto Perotti, 2002. "Estimating the effects of fiscal policy in OECD countries," Economics Working Papers 015, European Network of Economic Policy Research Institutes.
    7. Tenhofen Jörn & Wolff Guntram B. & Heppke-Falk Kirsten H., 2010. "The Macroeconomic Effects of Exogenous Fiscal Policy Shocks in Germany: A Disaggregated SVAR Analysis," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(3), pages 328-355, June.
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    Cited by:

    1. Anton Grui & Artem Vdovychenko, 2019. "Quarterly Projection Model for Ukraine," Working Papers 03/2019, National Bank of Ukraine.
    2. Dante Cardoso & Laura Carvalho & Gilberto Tadeu Lima & Luiza Nassif-Pires & Fernando Rugitsky & Marina Sanches, 2023. "The Multiplier Effects of Government Expenditures on Social Protection: A Multi-Country Analysis," Working Papers, Department of Economics 2023_11, University of São Paulo (FEA-USP).
    3. Olha Ogirko & Ihor Kret, 2018. "Фіскальна Політика Держави: Сутність Та Аналіз Особливостей Складових З Їх Компонентами [The Fiscal Policy of the State: the Essence and the Analysis of the Features of its Constituents with their ," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 4(8), pages 2001-2008, August.

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    More about this item

    Keywords

    Fiscal multiplier; fiscal policy; fiscal shocks; VAR;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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